The Most Affordable American Cities Are…

A new report from the New York-based Citizen’s Budget Commission, which made the rounds at the Washington Postand CityLab, argues that if you consider the combined costs of housing and transportation, the answer to the dilemma posed in the headline is San Francisco, New York and Washington.

But a closer look at the data casts some doubt on that result. Between the high cost of transportation in sprawling areas and the high demand for housing in compact cities with good transit, very few places in America are looking affordable these days.

According to the report, New York City ranks third in affordability among 22 large cities. A ‘typical household’ in New York City, the CBC finds, spends 32 percent of its income on housing and transportation combined. Part of the reason New York comes out looking very good, though, is that CBC used a regional measure of income, but looked at typical rents in the city itself. Because the region’s median income is higher than the median income in the city ($62,063 vs. $51,865, respectively, according to 2008-2012 Census data), NYC appears more affordable than it actually is.

A commonly accepted definition of ‘affordability’ is when housing and transportation costs consume no more than 45 percent of income. For moderate-income families in several cities, including Jacksonville and San Diego, combined H+T costs exceed this threshold.